Allowed

Kochi Metro Rail Limited v. Shanavas

Kerala HC13 Dec 2017WA/2158/2017

Case brief

AI extract

What is this about?

This batch judgment addressed writ appeals challenging a lower court order that annulled private land acquisition agreements for the Kochi Metro project. The High Court held that sale agreements fix the deemed award under the new Land Acquisition Act, allowing landowners to apply for enhanced compensation. Interest calculation starts from possession release.

What did the court decide?

Sale consideration deemed as the initial award under Section 64; Interest calculated from date of possession release, excluding amounts already paid.

Kochi Metro Rail Limited Vs Shanavas — Land Acquisition | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE ACTING CHIEF JUSTICE MR.ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

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WEDNESDAY, THE 13TH DAY OF DECEMBER 2017/22ND AGRAHAYANA, 1939

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WA.No. 2158 of 2017

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AGAINST THE JUDGMENT IN W.P(C).NO. 19611 OF 2015, DATED 12-07-2017

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APPELLANT(S)/5TH RESPONDENT IN W.P(C) :

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KOCHI METRO RAIL LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, 8TH FLOOR, REVENUE TOWERS, PARK AVENUE, KOCHI- 682 011.

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BY SRI.K.JAJU BABU (SENIOR ADVOCATE) ADV. SMT.M.U.VIJAYALAKSHMI, S.C

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RESPONDENT(S)/PETITIONER & RESPONDENTS 1 TO 4 & 6 IN W.P(C) :

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1. SHANAVAS, AGED 31 YEARS, S/O.BASHEER, SHANAVAS MANSIL, 43/51A AYYAPPAN KAVU, KOCHI- 682 018.

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2. K.M.SEERIJAN, AGED 56 YEARS, W/O.BASHEER, SHANAVAS MANZIL, 43/51A AYYAPPAN KAVU, KOCHI- 682 018.

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3. BASHEER, AGED 60 YEARS, S/O.MUHAMMED YUSEF, SHANAVAS MANZIL, 43/51A AYYAPPAN KAVU, KOCHI- 682 018.

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4. STATE OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY, THIRUVANANTHAPURAM- 695 001.

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5. THE LAND REVENUE COMMISSIONER, THIRUVANANTHAPURAM- 695 033.

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..2/-

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..2..

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WA.No. 2158 of 2017

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6. DISTRICT COLLECTOR, ERNAKULAM, COLLECTORATE, KAKKANAD- 682 030.

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7. STATE OF KERALA, REPRESENTED BY THE SPECIAL TAHSILDAR (LA), METRO NO.I, KAKKANAD- 682 030.

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8. THE MANAGING DIRECTOR , KITCO LIMITED P.B.NO. 1820, RAVIPURAM, M.G.ROAD, ERNAKULAM, COCHIN- 682 016.

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R1 TO R3 BY ADV. SRI.T.R.S.KUMAR

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R4 TO R7 BY SRI.RENJITH THAMPAN, ADDITIONAL ADVOCATE GENERAL BY GOVERNMENT PLEADER SRI.JAFARKHAN

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 13-12-2017, ALONG WITH W.A.NO. 2157 OF 2017 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Msd

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ANTONY DOMINIC, Ag.C.J. &

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DAMA SESHADRI NAIDU, J.

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A.Nos.1885, 1975, 1979, 1987, 1988, 1989, 1996, 1997,

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1998, 2013, 2016, 2026, 2033, 2042, 2057, 2059, 2066, 2069, 2074, 2078, 2092, 2093, 2096, 2119, 2120, 2152, 2157, 2158 , 2161, 2162, 2169, 2174, 2175, 2203, 2207, 2211, 2315, 2329, 2333, 2338, 2365, 2392, 2395, 2402, 2406, 2415, 2449, 2466, 2478, 2480, 2490, 2491, 2497, 2479 and 2501 of 2017

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Dated this the 13^th day of December 2017

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JUDGMENT

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Dama Seshadri Naidu, J.

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Kochi Metro Rail is a joint venture project undertaken by the

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Government of India and the Government of Kerala. Kochi Metro

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Rail Limited (“the Company”) was incorporated as a Special Purpose Vehicle for implementing the project of laying metro railline in the city of Cochin.

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To acquire certain pieces of land for the project, the Government, at the Company’s request, issued a notification under

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W.A.No.1885 of 2017 & conn.cases

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Section 4(1) of the Land Acquisition Act, 1894 (“the Old Act”). Before it could proceed further, the Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act, 2013 (“the New Act”) came into force on 1.1.2014.

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But there existed, according to the Company, certain statutory lacuna: absence of rules. So, given the urgency, the State and the Company have decided to acquire lands through private negotiations. Accordingly, the authorities entered into agreements of sale with various land-owners, most of whom are the respondents in these appeals. After paying 80% of the sale consideration, the Company took the possession of the lands and went ahead with the project, which in fact was completed. All the agreements of sale reveal that the land- owners would get the

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W.A.No.1885 of 2017 & conn.cases

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balance sale consideration on their executing the regular sale deeds.

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Yet, the agreements of sale contain a particular recital: The land-owners could take advantage of the new enactment if that would result in enhanced compensation. Accordingly, the landowners represented to the authorities but met with no success. As a result, all of them approached this Court by filing a batch of writ petitions.

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Through a common judgment, dated 12^th July 2017, a learned Single Judge allowed W.P.(C)No.19611 of 2015 and the connected matters. The judgment holds that neither the State nor the Company has a right under the new Act to purchase land by negotiations—bypassing the beneficial legislation. It further declares that the entire acquisition—rather the purchase—comes to nothing and that the authorities should determine the compensation

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W.A.No.1885 of 2017 & conn.cases

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and pass awards under the new Act. Aggrieved, both the State and

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the Company have filed these intra-court appeals.

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To begin with, Sri Jaju Babu, the learned Senior Counsel

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for the Company, has contended that as the rules under the new Act had not been framed by then, the authorities could not take recourse to the new Act. But, given the urgency, they negotiated with the land owners and purchased the property. According to him, the negotiations were transparent, and no land owner was coerced into the transaction. All the land owners, being aware of the consequences, have signed the agreements, parted with possession, and received 80% of sale price as compensation, submits the learned Senior Counsel.

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Sri Jaju Babu has also contended that the learned Single Judge has erred in observing that neither the State nor any

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W.A.No.1885 of 2017 & conn.cases

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instrumentality of the State has power to enter into such negotiations. The Metro Company, a legal entity, could as well negotiate and purchase the property under the Transfer of Properties Act.

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Though the Government issued guidelines about how the authorities could purchase the property through private negotiations, submits the learned Senior Counsel, the Purchase Committee constituted by the Government, at any rate, provided further concessions to the land owners; thus came the clause in the agreements of sale that the landowners could take advantage of the enhancement, if any, under the new Act. In the end, Sri Jaju Babu has contended that the benefit, if at all, to be extended should be confined only to the sale consideration and no further.

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W.A.No.1885 of 2017 & conn.cases

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Sri Renjith Thampan, the learned Additional Advocate

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General, for the State, contends that throughout the country various State Governments and also other public entities have taken recourse to private negotiations to purchase property, instead of taking recourse to the new enactment—only to avoid the cumbersome procedure. He also submitted that no law deprives the State to act as if it were an individual and buy property under the Transfer of Property Act.

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On the interest component, the learned Additional Advocate General has pointed out that the new Act could not be applied. According to him, since there was no notification, there could be no reckoning point to calculate the interest. Remedially, he suggests interest can be calculated from the date the land owners parted with the possession.

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W.A.No.1885 of 2017 & conn.cases

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Per contra , the learned counsel for the respondent-land owners have submitted that the agreements, though unambiguous, have been entered into only as a temporary measure before the new Act became operational. In other words, all the respondents’ counsel assert in unison that the landowners should not be deprived of the benefits under the new Act. At any rate, they have contended that the judgment is unassailable, the acquisition should commence de novo, and all benefits due to the land-owners should be extended.

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Heard Sri Jaju Babu, the learned Senior Counsel for the Company, Sri Renjith Thampan, the learned Additional Advocate General, Sri Jafi Khan, the learned Government Pleader, and the learned counsel appearing for the party-respondents, besides perusing the record.

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W.A.No.1885 of 2017 & conn.cases

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To begin with, the learned Single Judge observed in the impugned judgment that the State has been denuded of its power to enter into private negotiations and purchase property, instead, it has to acquire the lands only under the new Act. The reason assigned seems to be that the old enactment had an express provision for negotiated purchase of the property, but it is absent in the new Act.

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The State and the Company have emphasized that the State, without reference to its eminent domain, has the power to purchase and hold property like an ordinary citizen—even in the face of the new Act.

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First, we will address the issue whether, in the light of the new Act, the State or its instrumentalities have the power to purchase property through private negotiations like an ordinary

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W.A.No.1885 of 2017 & conn.cases

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citizen. But that question needs no answer, it renders itself academic hove. The very agreement of sale refers to the new Act and the benefits accruing under it. So the question whether the State and its instrumentality can contract to purchase property could be resolved in another appropriate case. Rather, it is a matter of enforcing the agreement.

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As much turns on the provision in the agreement extending the benefits of the new Act to the landowners, we may extract that clause. It reads as follows:

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If there is any hike in the compensation at the time of implementing “The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act 2013” the land owner is entitled to the increase of the compensation, if any.

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True, this clause has been present in almost all the agreements of sale, but with minor variations. The variation, if any,

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W.A.No.1885 of 2017 & conn.cases

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does not affect the substantial scope of the clause. So, we take it to be uniform in all cases.

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Indeed, the State and the Company admit the above clause. The dispute is about its scope and extent of applicability. We should, therefore, proceed on the premise that the new Act applies. That said, we must further probe how to reckon the increased compensation and how to apply it to the individual cases.

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Sections 26 to 30 of the new Act deal with the procedure for determining the compensation. Here, after negotiations, the parties have consensually fixed the sale consideration and entered into a transaction of sale. The sale is yet to be completed, though. On the strength of agreement, the Company paid substantial consideration and possessed the lands. The project has been completed, too.

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W.A.No.1885 of 2017 & conn.cases

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Under these circumstances, it serves the interest of both

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the parties if we reckon the sale consideration under the agreements of sale as the amount awarded in the first instance by the primary authority or the Land Acquisition Authority. Therefore, the sale consideration must be the deemed award for the landowners to seek enhancement under section 64 of the new Act.

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That accepted, it is open for the landowners to apply to the District Collector, who, in turn, will act on the landowners’ representations: He will refer the matters to the Competent Authority under section 64 of the new Act within six weeks from today.

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As to the interest to be awarded, we clarify that in the absence of any notification, there could be no reckoning point. So, it may be reckoned from the date the land-owners parted with the

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W.A.No.1885 of 2017 & conn.cases

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possession. We also clarify that the Competent Authority, while calculating interest on the enhanced compensation, if any, will exclude the amounts already paid to the landowners: 80% of the sale consideration.

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Needless to observe that the landowners may as well execute registered sale deeds and receive the remaining 20% sale consideration, pending the enhancement proceedings before the Competent Authority under section 64 of the new Act.

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Now, it is brought to our notice that in about 12 agreements of sale, the above extracted-clause concerning the enhanced compensation in terms of the new Act is absent. First, we must not forget that it is the State or its instrumentality that has entered into the contract. Second, inadvertent absence of the clause in certain agreements of similarly placed landowners should not act

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W.A.No.1885 of 2017 & conn.cases

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to their prejudice. Lest it should reek discrimination and inequity. In other words, those landowners, too, should be treated on a par

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with others with the protective clause in their agreements of sale.

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In the manner stated above, we dispose of the Writ Appeals.

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sd/-

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ANTONY DOMINIC ACTING CHIEF JUSTICE

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sd/- DAMA SESHADRI NAIDU JUDGE

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jes

Kochi Metro Rail Limited v. Shanavas

Case brief

What is this about?

What did the court decide?

Kochi Metro Rail Limited v. Shanavas

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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